Central Message Reaffirmed

Most of the rhetoric deployed in Governor Orr’s press conference thus far has reaffirmed the messaging in the RBNZ’s post-meeting statement and accounts of the meeting.

• Governor Orr pointed to a neutral OCR range in the 2-3% zone. Previously there had been some focus placed on the Bank’s “around 2%” language, which the Governor played down, stressing that the Bank’s assessment of neutral has not changed.
• Orr reaffirmed the need to go into restrictive territory when it comes to the OCR, with a focus on inflation expectations. He also pointed to monetary policy settings that are “at least neutral” at present.
• There was continued talking up of the New Zealand economy's ability to deal with tightening, particularly referencing household balance sheets and bank capitalisation.
• Orr also pointed to RBNZ OCR moves being largely in line with market pricing, albeit not being in line with every economist’s view.